Mr. Grant Fagerheim reports

WHITECAP RESOURCES INC. CLOSES THE VEREN COMBINATION CREATING A LEADING CANADIAN OIL AND NATURAL GAS PRODUCER, AND INCREASES PRODUCTION GUIDANCE

Whitecap Resources Inc. has closed its strategic combination with Veren Inc., creating the seventh-largest oil and natural gas producer and the fifth-largest natural gas producer in Canada. Whitecap is now the largest Alberta Montney and Duvernay landholder and a prominent light oil producer in Saskatchewan with an enviable portfolio of premium drilling opportunities, which provides for decades of sustainable production and funds flow growth. Whitecap plans to leverage the combined asset base and technical expertise to drive incremental improvements to profitability and increased returns to shareholders.

The combined company will be led by Whitecap's management team along with an 11-member board of directors, including seven Whitecap directors: Ken Stickland (chair), Grant Fagerheim (president and chief executive officer), Vineeta Maguire, Glenn McNamara, Steve Nikiforuk, Brad Wall and Grant Zawalsky. The four new directors joining from the Veren board of directors are: Craig Bryksa, Jodi Jenson Labrie, Barbara Munroe and Myron Stadnyk. Stepping down from their roles as Whitecap directors are Mary-Jo Case and Chandra Henry. Whitecap would like to thank Ms. Case and Ms. Henry for their leadership, guidance and contributions as directors to the success of Whitecap.

Non-strategic asset dispositions

Whitecap has entered into two agreements to dispose of certain non-strategic assets for aggregate consideration of $270-million, prior to any closing adjustments. The non-strategic assets include approximately 8,000 barrels of oil equivalent per day (90 per cent liquids) of medium oil production in southwestern Saskatchewan and an 8.333-per-cent working interest in a natural gas facility in the Kaybob region. The dispositions are expected to close on or before June 30, 2025, subject to customary closing conditions, with the proceeds directed toward the company's balance sheet.

2025 guidance

After accounting for the Veren combination and the non-strategic asset dispositions, the company is increasing its average 2025 production forecast to 295,000 to 300,000 boe/d (63 per cent liquids) on capital expenditures of approximately $2.0-billion for the year. For the second half of 2025, the company expects production to average 363,000 to 368,000 boe/d (62 per cent liquids) on capital expenditures of approximately $1.1-billion.

Unconventional

The company plans to allocate approximately 75 per cent of its second half capital budget to its Montney and Duvernay assets, which include drilling 67 (58.1 net) wells, of which 66 (63.5 net) wells are expected to come on stream in the second half of the year (including wells drilled in the first half of 2025). It is currently running six unconventional rigs focused on areas with established technical understanding and available infrastructure capacity.

Application of the company's unconventional development workflows on the acquired lands has already commenced, and the company will proceed with the integration of the two technical teams and undertake detailed reviews of the respective assets. Through this process, it will investigate opportunities for overall enhancement of the asset base through variations on development, including well spacing, benching, completion technology and drawdown strategies. As with its development to date, its priority remains on long-term value generation from these lands through deliberate progression of capital-efficiency improvement initiatives.

Montney

At Musreau, it plans to drill a six-well (6.0 net) pad late in the second quarter, which will be completed in early 2026, as plant capacity becomes available. It is also investigating debottlenecking options at this facility to modestly enhance the pace of development of these lands, which could add 10 per cent to 20 per cent of incremental throughput.

In Kakwa, completions are scheduled to commence late in the second quarter on its latest four-well (4.0 net) pad, with production on stream in the third quarter. This pad features interwell spacing of 250 metres, consistent with its interwell spacing pilots in Kakwa in 2023, which were successful in improving per-well recoveries. It is also anticipating the spud of an eight-well (1.6 net) non-op pad in the area, which will be drilled in later 2025 and on production in 2026.

In Lator, a planned three-well (3.0 net) pad at 10-24-061-03W6 will continue to progress its technical delineation in this area. This pad is positioned to further confirm the productive capability of the core of its land base and quantify the impact of interaction between a variety of offset development conditions. Its 04-13 facility is expected to commence earthworks and civil construction in the second half of this year as the company continues to progress toward a late 2026/early 2027 commissioning and start-up. Costs of the facility are expected to remain within the company's original expectations of $250-million to $300-million, financed through its strategic partnership with Pembina Gas Infrastructure.

In Gold Creek and Karr, the company plans to drill 21 (21.0 net) wells in the second half of this year, building upon strong legacy results in this area. Its efforts will be focused on utilizing available infrastructure capacity that has been materially debottlenecked over the past 12 months. It plans to perform a detailed asset review through the third quarter, utilizing its unconventional workflow to assess the impact of well design changes, including plug-and-perf completions. It will assess the effectiveness of these changes while moderating risk exposure, consistent with its approach to drilling and completion optimization across its unconventional asset base over the years.

Duvernay

In the second half of the year, it plans to drill 35 (32.5 net) Duvernay wells with a focus on areas with good subsurface control and available infrastructure.

Included in those activities are 11 (11.0 net) wells in the volatile oil window of Kaybob North and 24 (21.5 net) wells in the liquids-rich gas window of Kaybob South. It expects that this will result in its 15-07 gas processing facility operating at capacity of approximately 36,500 boe/d in the third quarter of 2025. Concurrently, a recently constructed connection to a nearby third party processing facility will be commissioned, which will allow for incremental productive capacity of approximately 7,000 boe/d.

It expects significant infrastructure synergies to come from the Kaybob area, where it plans to reduce capital expenditure duplication on trunk lines, compression and associated development infrastructure.

Conventional

It plans to invest approximately 25 per cent of its second half capital budget on its conventional assets, which include drilling 91 (74.8 net) wells in Saskatchewan and 10 (5.2 net) wells in Alberta. Its conventional assets in both Saskatchewan and Alberta provide Whitecap with strong free funds flow generation to support its return of capital strategy to shareholders.

Saskatchewan

In eastern Saskatchewan, its second half of the year Frobisher program will be the most active with 25 (22.8 net) wells planned with two rigs. The majority of this activity commences in late September, and will continue to focus on triple leg lateral wells to maximize royalty incentives and well economics. This program will continue to build off the momentum of its first quarter program, which outperformed IP90 expectations by approximately 25 per cent.

In western Saskatchewan, the company plans to drill 18 (18.0 net) Viking wells in its legacy Kerrobert and Dodsland properties, and in southwestern Saskatchewan, it plans to drill 17 (13.8 net) wells focused on the Shaunavon and Success formations. These areas are further supported by a low-decline enhanced oil recovery base, which provides for strong free funds flow generation.

At Viewfield, it plans to drill 17 (11.1 net) Bakken wells, including nine open hole multilateral wells ranging 1.0 to 2.0 miles in length with approximately eight legs per well. The remaining development will target historical horizontal multistage fracturing designs.

At Weyburn, where it owns and operates a world-class carbon capture, utilization and storage project, it plans to drill 14 (9.1 net) wells to continue to support the low 3-per-cent to 5-per-cent base decline rate in this area.

Alberta

The company's conventional assets in Alberta will continue to focus on Cardium and Glauconite development with the drilling of six (3.6 net) Cardium wells in West Pembina and three (1.2 net) wells in the Glauconite. Both assets have continued to exceed the company's expectations, with strong results and well design enhancements further improving the economics in these plays.

Strong credit profile

Whitecap has also entered into a new $3-billion unsecured four-year credit facility with its syndicate of banks, which replaces Whitecap's existing credit facility. The new facility, combined with its existing $1.4-billion investment-grade senior notes and $223-million private placement notes, results in total credit capacity of $4.6-billion. At $60 (U.S.) per barrel West Texas Intermediate and $2.50 per gigajoule Alberta Energy Company, net debt is expected to be approximately $3.4-billion by year-end, which represents a net debt to annualized funds flow ratio of approximately 1.0 times and leaves the company with $1.2-billion of unutilized capacity.

Whitecap's materially improved business risk profile, low leverage and ample liquidity position it well to navigate through the current market volatility and to execute on its long-term strategic priorities.

Strategic priorities

It continues to prioritize balance sheet strength by ensuring capital expenditures and dividends are covered by its funds flow. Its capital investments are focused on capital efficiencies and free funds flow generation with a long-term organic production growth target of 3 per cent to 5 per cent per share enhanced by share repurchases. The dividend provides stable and reliable cash returns to shareholders during periods of commodity price volatility, and is well supported by a best-in-class portfolio with decades of free funds flow generation and an excellent balance sheet with low leverage and ample liquidity.

The integration of Veren's assets is well under way and expected to be seamless given the significant operational overlap, its technical expertise in each of the areas, and its proven ability to effectively acquire, integrate and optimize historical acquisitions. The company will use its technical, operating and financial expertise to realize the previously identified $200-million of initial synergies over the next six to 12 months with the potential to further reduce its controllable costs and improve its capital efficiencies over the long term. It is very excited about the future potential of its consolidated portfolio and looks forward to reporting back to shareholders on its progress.

We seek Safe Harbor.